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Organizational Entrepreneurship and Administrators of Hospitals:

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1. Introduction
Today, organizational environment is so complex and uncertain that institutions can no longer
survive through superficial changes such as changes in the method, system and structure
(Amirkabiri & Fathi, 2010). In the recent years, several attempts have been made in the field
of competition with the aim of detecting entrepreneurs who have capabilities in creating new
workflows, in creative problem solving and in developing other necessary capacities
(Ernesto-Amoros et al., 2010; Alimardani & Ghahramani, 2009).
Entrepreneurship is a significant source of social mobility that covers various subjects, but
the problem is that many areas of entrepreneurship in research are still virgin (Luke &
Verreynne, 2006). Some studies have shown that about one third of America’s workforces in
business are women showing that gender does not play a significant role in creating
entrepreneurship (Peris-Ortiz et al.,2012). Entrepreneurship is one of the most efficient
methods of operation and management of change, which the motion of the operation
(bureaucracy) is converted into the attitude, culture and entrepreneurial management
(Jahangiri & Kalantari-Saghafi, 2008).
Learning and innovation are fundamental requirements for organizations that are seeking
effectiveness and survival. Many organizations are also looking for highly innovative and
entrepreneurial approaches to improve their effectiveness, efficiency and flexibility
(Haghshenas et al.,2008). Based upon previous conducted research studies and evidences
about management and policy in Latin American countries, to achieve economic and
entrepreneurship dynamism, and to become innovative companies with high added value, the
policy makers need to establish entrepreneurial culture (Ernesto-Amoros et al.,2012). The
importance and capabilities of organizational entrepreneurship is fully perceptible because
employees give new value to the services and products offered by the organization, and this
highlights the learning, creation and innovation synchronization that will not be complete
without any information factor (Vilaseca-Requena et al., 2007). Entrepreneurship is like an
environmental organization in which creativity and innovation of staff are blossomed, and
issues like communications and information technology flourish more by providing timely
and uniform distribution of the information (Antoncic, 2007). Every year, entrepreneur world
scout examines the rates of entrepreneurial activities and barriers to entrepreneurship by
implementing field research in member states. These cases represent a global effort on this
issue on the basis of offering the practical recommendations and encouraging the exchange of
best practices and benchmarking so that it provides a basis for synergy and strengthens
entrepreneurship development programs at the country level (Bosma et al.,2008). In general,
the processes of organizational entrepreneurship in private and public organizations can be
presented for nonprofit organizations. Researchers in various disciplines have studied public
entrepreneur-ship, but there is little work in management and economics on the natur (Klein,
Mahoney, McGahan, & Pitelis, 2010).
Due to rapid changes in technology and scientific advances among health care provider
organizations, determining the future needs and planning them appropriately are very
difficult. Health care systems like other economic organizations in the world are very
complex and chaotic in which traditional approaches no longer apply. Lack of accurate
planning and management in these systems will limit the expectations and creativity which is
required to solve complex and new prospective problems of health care. Accordingly, for the
conservation and sustainability of the organizations in the era of development and
reconstruction of health care systems, innovation and entrepreneurship are a prerequisite
(Asefzade & Rezapor, 2007).
Factors such as increasing costs of services, competition, expensive equipment, old
population and high cultural diversity affect health services environment. Healthcare related
organizations exposed to these challenges are more complex; therefore, they seek solutions
for their long-term survival. Achieving such solutions wont be possible without change,
innovation and an entrepreneur attitude (Robey, 1998). Different experts have offered
numerous scientific and practical frameworks for the study of entrepreneurship within the
organization. Many researchers have examined the results of entrepreneurship within
organizations and its different dimensions. The growth and profitability of the organizations
as well as the customers’ satisfaction have been the principal dimensions of entrepreneurship
outcomes (Antoncic & Hisrich, 2001). According to the relevant previous studies conducted
in this field and due to the importance of managers’ viewpoints and their performances in
promoting the entrepreneurial culture, learning and innovation for healthcare organizations
with regard to the nature of their activities are an essential need. In addition, rapid
technological changes and scientific advances in healthcare systems and the need for
immediate planning in healthcare will necessitate the presence of entrepreneur managers in
this area. The study aims to examine the business activities in hospitals but it seems there is
an analysis of point of view of managers about the possibility/need to develop a more
organizational entrepreneurship
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2. Method
This cross-sectional study was conducted among senior and middle managers in 10 selected
hospitals affiliated to Tehran University of Medical Sciences (TUMS), Iran. Study population
was all senior and middle executives, including chairmen and chief executives, directors of
hospital financial departments, directors of administrative-support departments, senior
supervisors, as well as training and clinical supervisors in the hospitals affiliated to TUMS.
Ten hospitals were randomly selected from among all 26 hospitals affiliated to TUMS. Data
collection tool was a reliable and validated questionnaire consisting of two main parts. The
content validity and face validity of the questionnaire were checked by two experts in the
field based upon two designed forms (content validation form and face validation form).
Moreover, to see the internal reliability of the questionnaire, Cronbach’s alpha coefficient was
calculated. The coefficient was found to be 0.77 (Yadolahi-Farsi et al.,2008). The obtained
coefficient indicated a good internal reliability for the the questionnaire.
The first part of the questionnaire deals with the respondents’ demographic information
including age, sex, years of working experience and education level. The second part
included 29 items in the areas of innovation, creativity, flexibility, empowerment, reward
systems and the management support. The items were designed on a five-point Likert scale of
agreement, where 1 = strongly disagree, 2 = disagree, 3 = undecided, 4 = agree, and 5 =
strongly agree. While distributing the questionnaires, more explanations were given to the
respondents regarding the aim and scope of the study, as well as how the questionnaire should
be filled out. Furthermore, if the respondents were interested in the research results, they
were assured that the findings will be sent to them after analyzing the obtained information.
Moreover, the respondents were given enough time to fill out the questionnaire. At the end,
the collected data was entered into the SPSS software, version 18, and then data analysis was
performed using the t-test, two-way ANOVA and Pearson correlation test.
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3. Results
This study was conducted in 10 hospitals affiliated to Tehran University of Medical Sciences.
In total, 120 questionnaires were distributed among the managers but 95 questionnaires were
returned. About 70 % of the respondents were female and the rest of 30 % surveyed managers
were male. The age distribution showed that about half of the surveyed managers were in the
age range of 40-49 (45.6%). Most of the respondents had bachelor’s degree and they had
managerial experience between 10 to 20 years (see Table 1).
Table 1
Frequency distribution of managers in terms of demographic characteristics

Variable Number Percent

Age range 20-29 8 8.9%

30-39 32 32.8%

40-49 44 45.6%

50-59 11 12.7%

Educational degree Diploma 2 2.2%

Associate`s degree 2 2.2%

Variable Number Percent

BA 67 68.8%

MA 17 18.2%

Ph.D. 7 8.6%

Work experience in managerial posts 0-5 13 13.4%

6-10 10 10.4%

11-15 28 28.4%

16-20 28 29.9%

21-25 16 17.9%

The results showed that the majority of the managers agreed with all five areas of
entrepreneurship namely the existence of innovation and innovative behavior, flexibility,
decision making, rewarding and encouraging system, as well as management supportive
system of personnel’s new ideas. In fact, the managers generally had positive attitude towards
entrepreneurship in their organizations (see Table 2).
Table 2
Average areas related to entrepreneurship among the managers of the hospitals
Areas Strongly agree & Undecided Disagree & Strongly
Agree disagree

Level of innovation and innovative behavior 46.5 % 32.3% 21. 2 %

Level of flexibility 55.6 % 23.8% 20.6 %

Decision making 63 % 21.4% 15.6 %

Rewarding and encouraging system 45 % 32.8% 22.2 %

Management supportive system of personnel’s 45.4 % 33.6 % 21. %

new ideas

Average 51.1 % 28.8% 20.1 %

The t-test did not show any significant relationships between the managers’ gender and the
areas under investigation. The Pearson test showed that, except for the second area namely
level of flexibility, there is a significant relationship between managers’ working experience
and the areas under investigation (see Table 3).
Table 3
Relationship between the areas of entrepreneurship and managers’ working experience

Areas Pearson P value

Level of innovation and innovative behavior -0.359 0.003

Areas Pearson P value

Level of flexibility -0.22 0.072

Decision making -0.25 0.040

Rewarding and encouraging system -0.32 0.008

Management supportive system of personnel’s new ideas -0.37 0.002

The Pearson negative value indicates a negative relationship between the areas under
investigation and the managers’ working experience. In other words, younger managers agree
much more with entrepreneurship within their organizations.
Table 4 shows the relationship between the managers’ age and the areas of entrepreneurship.
Pearson test showed that there is a negative. In other words, the level of entrepreneurship is
lower in the older managers. In total, the overall average of the five areas under investigation
showed that most of the managers agree with entrepreneurship in their hospitals.
Table 4
Relationship between the areas of entrepreneurship and managers’ age

Areas Pearson P value

Level of innovation and innovative behavior -0.36 0.001

Level of flexibility -0.27 0.016

Decision making -0.26 0.021

Areas Pearson P value

Rewarding and encouraging system -0.23 0.040

Management supportive system of personnel’s new ideas -0.30 0.008

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4. Discussion

4.1 Level of Innovation and Innovative Behavior

In this area, less than half of the respondents (46.52%) agreed with the innovation and
innovative practices in their organizations. However, about one-fifth of the surveyed
managers (21.12%) disagreed with this level of entrepreneurship in their organizations.
Therefore, this factor can be regarded as an important factor in entrepreneurship in the
hospitals. The results of this study are in accordance with the findings of Reisi et al. (2008) in
which they found that creativity and innovation are effective factors in entrepreneurship.
Moreover, Tafazoli (1994) stated that the major reason for economic backwardness in
developing countries is the lack of individual creativity understanding. He pointed out that
although the human spirit for success is formed in childhood, it is possible to make a creative
spirit and business mission in people by proper training programs. Without any doubt, both
innovation and entrepreneurship are essential components for obtaining desirable results.

4.2 Level of Flexibility

In this area, more than half of the surveyed managers (55.60 %) agreed with the flexibility in
their organizations. Sean (2005) also referred to a direct relationship between flexibility and
improvement of organizations’ performance and considered it as an effective factor in
innovation and doing innovative practices. The concept of flexibility in the last decade has
attracted a great deal of researchers’ attentions. This concept has been defined as the
organization’s ability to respond to the diverse demands of its dynamic competitive
environment (Ngo & Loi, 2008). Although the concept of flexibility covers both the
employees and the structure of organizations, this concept is a subset of entrepreneurship.
Accordingly, the success of an organization in entrepreneurship directly depends upon the
level of flexibility in that organization.

4.3 Decision Making

In the area of considering empowerment as an encouragement to the employees, about two-
third (63%) of the respondents agreed to give authority to managers and lower level
employees. In his study, Shirzad (2001) concluded that implementation of empowerment
programs attract managers’ attention to the basic objectives, accelerate decision-making and
increase motivation. Moreover, Shahab (1999) stated that empowerment is the second priority
which management needs for doing better administrative and executive activities. Therefore,
it can be concluded that entrepreneurship in organizations with empowerment raises the
participation rate among the employees and increases their motivation to perform better so
that it can be considered as one of the important pillars of entrepreneurship within the

4.4 Reward and Encouragement System

With regard to the hospitals equipped with rewarding and encouraging systems for the
entrepreneurial ideas, less than half of the surveyed managers (45%) welcomed the presence
of this system. However, 22.13% of the respondents disagreed with this system in the
hospitals. In general, rewarding system in entrepreneurial organizations has its own
characteristics. Practicality and feasibility of the considered reward is one of them. For
example, bonuses considered for the employees should be payable. The rewards should also
be available for the employees. In this regard, various incentives should be employed. Both
financial and non-financial incentives are important, but more intrinsic encouragements
should be used (Cornwall & Perlman, 1990). Sykes and Block (1989) believe that
organizations must consider a rewarding system to overcome the bureaucratic barriers and
move towards entrepreneurship with more emphasis on giving the reward on the basis of
employees’ performances. Providing appropriate encouragement and rewarding systems is
one of the most important factors in entrepreneurial organizations. Traditional methods of
promotion and reward can rarely be effective for entrepreneurs (Stevenson & Gumpert,
1985; Thompson, 1999). Using appropriate rewards can raise employees’ desire to accept the
risks associated with entrepreneurial activities. Thus, although reward system is supposed to
be simple, several studies have shown that there is a direct relationship between the level of
entrepreneurial organizations and reward system. In this study the majority of administrators
agreed with this system in their organizations.

4.5 Management Supportive System of Personnel’s New Ideas

In this area, less than half of the surveyed managers (45.39 %) believed in the presence of
management supportive system of personnel’s new ideas in their organizations. According to
Paolini (1991), supporting the personnel is considered as one of the five major steps of
entrepreneurship development process within organizations. In his study, Yusuf
(1995) concluded that one of the critical factors affecting success of entrepreneurship is the
organizational support such as providing infrastructures and training facilities. This study
indicated that there is a significant relationship between managers’ age and each areas of
entrepreneurship. In this regard, Knight (1997) determined a set of criteria for measuring
entrepreneurial tendencies that show a negative relationship between the managers’ age and
taking risks. Moreover, in his study, Ahmadpor-Daryani (2000) showed that younger people
need to succeed more than older people. With regard to the managers’ working experience,
except for the second area namely level of flexibility, there was a significant relationship
between managers’ working experience and the entrepreneurial areas under investigation.
In their study, Hornsby et al. (2002) concluded that there is a negative relationship between
managerial experiences and the amount of managers’ entrepreneurial activities. They stated
that more experienced managers are more cautious than younger managers in dealing with
organizational issues. Moreover, in their study on middle level managers, Floyd and
Woolridge (1994) found that there is a negative relationship between managerial experiences
of middle level managers and their tendency to do entrepreneurial activities; however, this
relationship was not highly significant. All in all, the results of this study and the findings of
other related studies illustrate the importance of the five areas of study in entrepreneurship.
Furthermore, it was shown that each of these factors is necessary to implement
entrepreneurship in an organization such as a hospital.
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5. Conclusion
It can be concluded that the more hospitals’ managers strengthen the characteristics
associated with entrepreneurship by giving value to their entrepreneurial ideas, the better they
can develop entrepreneurial activities within their respective hospitals. This also leads to
more staff participation within the hospitals. The process of entrepreneurial activities can be
improved by changing the culture of hospitals through providing a suitable environment for
creative people, creating a system of reward and encouragement, giving more authority to
subordinates, promoting personnel’s awareness, training the personnel in the field of working
values and responsibility, and increasing managers’ ability to absorb appropriate opportunities
for organization. In the areas such as healthcare services, organizations can be more
irresponsive against changes, because the entrepreneurial organization is an organization that
is capable to strengthen creativity and innovation according to environmental changes and
structural complexity. In organizational entrepreneurship, the structural dimensions are
regarded as the important issues that seriously prevent the spread of entrepreneurship and act
as a barrier against the employees. Several studies have shown that there is a negative
relationship between entrepreneurship and complexity in the organization because complexity
reduces the relationship among the group members within the organization. Moreover, there
is a negative relationship between entrepreneurship and formality because the personnel’s
formality reduces the flexibility and freedom within an organization. For creating
entrepreneurial activities within the organizations such as the hospitals, it is required to
remove the barriers, such as structural complex aspects. Bureaucracy in organizations must
be at the lowest level; however, due to the existence of bureaucracy in most of the Iranian
organizations, it may be a little hard to imagine basic change in their structures. Nevertheless,
in order to keep pace with the changes, particularly the global changes, considering the above
mentioned entrepreneurial activities and their interactions seems inevitable.
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The authors would like to extend their gratitude to Tehran University of Medical Sciences
and Health Services for sponsoring the study. This research was funded by a grant number
132/1449 dated 26/09/2011.
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